PUBLIC SQUARE:Happy About Losing Money

Every frugal person has been upset about spending too much money on disposable items. Something you spend too much on and only get the oppurtunity to use once. We have all bought an expensive meal,  or spent $25 on a trip to the movies, but why does doing something enjoyable also create a subtle sense of "greed guilt".  It's that small feeling of remorse about spending that won't provide capital returns on the investment.  Well if you ever share this feeling, you should read more about Anil Ambani.


Ambani owns six publicly traded Indian companies.  Yesterday on Thursday February 10th Albani watched his stocks and, 

"saw a sharp fall resulting a $2.6 billion loss in the market value of his six publicly traded companies"

In Lay-man's terms, the man went to bed last night having lost $2.6 Billion.  Yes you read that right.  Before you create a "Save Ambani" movement realize that he is still worth approxamitely $17 Billion.  So next time you feel bad about blowing $10 on a drink 1/4 of the size you expect it to be IMAGINE your Anil Ambani; Then realize it could be worse.  

For those interested in the reasons, continue reading, if not thanks for learning.

So Ambani in a press conference proclaimed that,

 "Friday blamed stock brokers for spreading "baseless sensational charges" against the group, as shares of its companies fell sharply for the second day this week. Unlisted-Reliance ADA said it had identified the brokers who circulated charges through emails, text messages and voice calls and sought regulatory investigation against them." 

Basically what he is saying is that a few rival traders spread rumors about his companies and short sold the stocks.  A short sale is betting against a stock hypothysizing that it will fall in value in the future; if the stock loses value you win.  This is the opposite of a long sale, or buying a stock you believe will go up in value. So the rumores spread, causing shareholders to panic, leading into a large fall in price.  They then rebought the stock at a lower price and made $$$$.  Due to the stock market being a "zero balance" game that means that the people who shorted the stock, or sold shares as it fell made approximately $2.6 Billon.  Pretty nice for a day's work.  

For a US exam of this check out this micro example of APPLE on thursday.